You’ve likely seen the ads – Credit One promises a path toward building credit, even if yours is less than stellar. But what’s the real story behind this company, and are they the right fit for you?
Credit for the “Underbanked”
Credit One specializes in credit cards for people with subprime credit scores (typically below 670). Traditional banks often find these borrowers too risky, leaving them with limited options. Credit One steps in to fill that gap, offering a stepping stone for those working to rebuild or establish a credit history.
How They Do It
Credit One focuses on secured and unsecured credit cards.
- Secured cards: You provide a deposit (usually equal to your credit limit) to reduce Credit One’s risk.
- Unsecured cards: These work like traditional credit cards, but often come with higher interest rates and fees.
The Pros and Cons
Here’s the good and not-so-good of Credit One:
Pros
- Opportunity: A chance to get a credit card if you’re denied elsewhere.
- Credit building: Responsible use helps build your credit score with on-time payments.
- Potential for upgrades: Some cards may be upgraded to better terms with proven creditworthiness.
Cons
- Fees: Annual fees are common, and there can be other charges to watch for.
- High interest: Interest rates on their cards are far higher than those for prime credit customers.
- Limited rewards: Don’t expect fancy perks like travel miles or big cash-back programs.
Should You Consider Credit One?
Credit One fills a specific need. If you have poor credit and few options, their cards can be helpful if used responsibly. Here’s the key:
- Focus on building habits: Use the card only for what you can afford, and pay your bill on time, every time.
- View it as temporary: As your credit improves, seek better cards with lower fees and interest rates.
The Bottom Line
Credit One isn’t a magic bullet for perfect credit, and their cards come with costs. However, for those shut out by mainstream banks, they offer a potential path upward if you understand the game and play it right.